4 ms·
Jason, I have a theory, based on what I view as the most optimal way that labor markets work. Based on the system that we live in, everybody tends to benef
by marcamillion 16y ago
Jason,
I have a theory, based on what I view as the most optimal way that labor markets work.
Based on the system that we live in, everybody tends to benefit, when (in aggregate) everybody looks out for their self-interest. If they are not allowed to, there are distortions which actually impairs the benefits to both parties.
For instance, if employees look out for their own self-interest, they will do everything to get the best benefits. Likewise, if the company looks out for its own self-interest, it will aggressively try to attract the best talent. By doing that, they force existing employees to look out for their own self-interest by being the best they can be (i.e. as good as, or better than, incoming employees). Also, when companies aggressively try to attract the best talent, they tend to do things like listen to what the talents want and employ those things (more paid sick time, cafeterias, the best development machines, reasonable working hours, etc.).
When employees are the best they can be, and their employer is not doing everything they can to retain them, they can leave. That forces the employer to become better at retaining employees - which forces other employers to do the same and creates a perpetuating cycle.
So when a company undermines that, by for instance cancelling sick leave, or forcing 80-hour work weeks into perpetuity, the short term effects are that employees will leave (if they are the best they can be at what they do, which we can assume they are otherwise they wouldn't be at the company) to greener pastures and if the company self corrects, they will once again attract and retain the best talent. If they don't self-correct, they will die. Perhaps a slow, long, death. Or just exist in limbo with lots of D class employees providing mediocre service.
We see this phenomena playing itself out in the Valley now between Google and Facebook. But it's not new. Before it was Yahoo and Google, Google and Microsoft, Microsoft and IBM, Apple and Microsoft, etc.
That's one of the reasons that I think that unions are a bad idea - because they distort this mechanism and allow employees to get lazy and not make sure they are the best at what they do (or add significant value in some other way).
Based on my theory, I think you are missing the idea. Forcing your employees to live through hell, but spraying their face with mist every now and then (with chefs, and laundry service - which were, quite ironically, forced on you by your other successful competitors) and telling them they are cool, doesn't make hell any cooler. At the end of the day, it's still hell. And they know it.
I don't believe that you would have a chef, laundry service, car washing, etc. if Google, Facebook, et al. didn't have similar services and you weren't competing with them. That, however, is just based on what I have deduced from public statements that you have made - so that could be wrong.
- phlux 16y ago>Based on the system that we live in, everybody tends to benefit, when (in aggregate) everybody looks out for their self-interest. Isn't that the basic premise of Game Theory? and more specifically the Nash Equilibrium? (http://en.wikipedia.org/wiki/Nash_equilibrium http://en.wikipedia.org/wiki/Nash_equilibrium)
- marcamillion 16y agoThanks for this....it's not quite the same thing though. For instance, based on that Wikipedia article: >Stated simply, Amy and Bill are in Nash equilibrium if Amy is making the best decision she can, taking into account Bill's decision, and Bill is making the best decision he can, taking into account Amy's decision. Likewise, a group of players is in Nash equilibrium if each one is making the best decision that he or she can, taking into account the decisions of the others. However, Nash equilibrium does not necessarily mean the best cumulative payoff for all the players involved; in many cases all the players might improve their payoffs if they could somehow agree on strategies different from the Nash equilibrium (e.g., competing businesses forming a cartel in order to increase their profits). That's not what my theory says. The main thrust of my theory is that the players actually improve their payoffs if they make the best decisions (for themselves) that he or she can - without taking into account the decisions of the others. Because I believe, and this has to be tested of course, that if both parties do that, it will result in the best cumulative payoff for all the players involved. As opposed to the Nash equilibrium that 'encourages' players to do things like forming a cartel to improve profits - because in my theory, doing that will only lead to their eventual downfall because at some point another firm will do what is in it's own self-interest and expose the cartel. So everybody in the cartel would be worst off, but the one firm that sheds light on it, would be better off. It's an extreme version of virtuosity through extreme selfishness (if that makes any sense). It could be that I got my theory from somewhere and just don't know the actual name, and if I did I would love to find that name. But I have not stumbled across it yet, and I guess in the back of my mind I am hoping that it is original thought.
- iphoneedbot 16y agogood theory. but, it just almost never happens, and when it does- it happens temporarily in a very short amount of time: "players actually improve their payoffs if they make the best decisions (for themselves) that he or she can " -- the problem is that statistically, folks make bad decisions/ - often because, the motivation for that decision isnt clear. motivations play a key role as well as the individuals understanding of fairness.